<A> Micron Tech Up 7%; Reports Of DRAM Chip Price Rise Cited
By Christopher Grimes
NEW YORK (Dow Jones)--Micron Technology Inc. (MU) shares closed up 7.1% Thursday on reports that prices for memory chips have gone up for the first time in about six months.
While analysts were hesitant to call this a trend, some investors may be gambling that the commodity-like chip prices have finally hit bottom, said a person who has been monitoring the DRAM market for an investment bank, who declined to be identified.
According to a note by Lehman Brothers Inc. analyst Michael Gumport, prices for 16 megabit DRAM chips rose 5% Wednesday, while other types of chips rose as much as 15%.
"This is the biggest (only) price uptick we have seen in six months," the note said. But it went on to say, "We are still not fully persuaded that this uptick represents more than a temporary bounce from post-Christmas distress prices."
The price increases would bring the chips up to levels they had reached only a month ago, the bank monitor said.
There are a couple of stories floating around as explanations for the rise in prices. One is that South Korean manufacturers are having trouble shipping DRAMs because of financing problems with some suppliers, the monitor said.
Shares of Micron Technology, the largest American manufacturer of DRAMs, have risen lately, despite the company's missing first-quarter profit expectations in December. The stock hit a 52-week low of 20 on Dec. 15, the trading day before it said it missed Wall Street earnings expectations by 3 cents a share.
Its shares rose Thursday 1 7/8, or 7.1%, to 28 3/8 on very heavy volume of 8.9 million shares, compared with average daily volume of 3.8 million shares. |
